NEW YORK (TheStreet) -- Shares of Dow Chemical Co (DOW) are up 0.27% to $51.83 in late morning trading Monday, after the chemical company announced its plans to reduce its global workforce by 3% earlier today.
The company will trim about 1,500 to 1,750 positions to increase profitability.
Dow CFO Howard Ungerleider said, "Our productivity efforts continue to center on cost-out actions and doing more with the resources we have in place, all to enable higher earnings."
The company added that once the job cuts are fully implemented, it expects an annual operating cost savings of about $300 million.
Midland, MI-based Dow Chemical operates as an integrated science and technology company. It is a worldwide manufacturer and supplier of products used primarily as raw materials in the manufacture of customer products and services.
The company serves various industries, including appliance, automotive, agricultural, building and construction, chemical processing, electronics, and water treatment.
Insight from TheStreet's Research Team:
Dow Chemical is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager & Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:
Dow Chemical ( DOW:NYSE; $51.69; 1,750 shares; 3.47%; Sector: Materials): The shares were up this week following a strong earnings report last week in which EPS beat by 11%. Not only was first-quarter 2015 Dow's tenth straight quarter of EPS, EBITDA and EBITDA margin growth, it was also its best margin quarter since 2005, a testament to the company's revamped portfolio characterized by innovation-driven growth, differentiated products and more sustainable pricing.
While EPS will likely be down 4% in 2015 due to FX, lower olefins spreads and Sadara start-up costs, as well as the fact that buybacks have been suspended until the chlor-alkali transaction is closed (year-end), we see upside in 2016 as buybacks resume ($5 billion-plus) and recent project startups (Sadara, PDH) drive a resumption of growth. We also view the valuation as attractive, with the shares trading at just over 14x estimated 2016 EPS. Our target is $60.
- Jim Cramer and Jack Mohr, ' Weekly Roundup' originally published 5/1/2015 on ActionAlertsPLUS.com.
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Separately, TheStreet Ratings team rates DOW CHEMICAL as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOW CHEMICAL (DOW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."
You can view the full analysis from the report here: DOW Ratings Report